Scott Kennedy’s mREIT Earnings Series: Assessing ARMOUR Residential’s Performance For Q2 2024
Summary
This earnings assessment article reviews ARR’s BV and core earnings/EAD performance during Q2 2024 and compares results to expectations. Earnings remain a driver to stock performance.
ARR’s BV slightly underperformed my/our expectations (within range). This was mainly due to ARR adding some very low fixed-rate agency MBS coupons during June 2024 which negatively impacted BV.
ARR’s core earnings/EAD was a modest - notable outperformance. This mainly relates to a more enhanced increase in ARR’s weighted average asset yield which positively impacted net spread income.
In a nutshell, ARR “sacrificed” BV in lieu of a more enhanced increase to core earnings/EAD during Q2 2024. ARR’s July 2024 BV update was also a bit disappointing (only a fractional increase).
No change in ARR’s percentage recommendation ranges or risk/performance rating. ARR is currently deemed modestly overvalued (SELL).
Some additional commentary will be included for full members, but the summary is available for all.